Amid a deteriorating global outlook, Bank Negara is expected to stay on the cautious side and keep rates steady at 3% at its monetary policy meeting today.

Slower Loan
OSK Research Sdn Bhd’s (OSK Research) banking sector report released
recently shows that loans growth in the country continues to moderate.

The
report indicated that total loans growth toned down to 12.8 per cent
from 13.8 per cent to 13.4 per cent year-on-year (y-o-y) due to weaker
growth in the business loans segment which was up 14.3 per cent.

Business
loans growth was lower due to weaker purchases of non-residential
property (up 20.2 per cent), construction (up 18 per cent) and working
capital (up 10 per cent).

On the other hand, weak loans growth in
purchase of passenger cars (up 5.8 per cent) and residential property
(up 12.8 per cent) contributed to slowing household loans growth.

Loan
applications growth trended lower to 8.5 per cent from 29.9 per cent
y-o-y on muted growth in both the business (9.3 per cent for July and
38.5 per cent for June) and household segments (7.6 per cent for July
and 21.7 per cent for June).

Business loan applications declined
on slower demand in loans for the purchase of non-residential property
(up 25.6 per cent), construction (down 18.7 per cent) and working
capital (down 16.6 per cent).